Pequot Casino Monopoly May Not Be In The Cards

Casino Monopoly May Not Be In The Cards

November 14, 1992|By HILARY WALDMAN; Courant Staff Writer

As Las Vegas and Atlantic City casino operators woo Connecticut lawmakers in an effort to do business in the state, Gov. Lowell P. Weicker Jr. may have trouble playing a trump card he thought might offer hope for keeping them out.

Last month, an executive of the Mashantucket Pequots' Foxwoods casino said the Ledyard tribe might be willing to share some of its profits with the state in exchange for protection of its gambling monopoly.

Although no formal offer has been made, Weicker's lawyers have been researching the legalities of such an arrangement, said Lawrence J. Halloran, counsel to the governor.

Halloran said he believes some sort of profit-sharing arrangement could be worked out with the tribe. But a spokesman for the U.S. Bureau of Indian Affairs said the agency has rejected similar arrangements when they were proposed by other states.

Alfred J. Luciani, president of Foxwoods, told a legislative task force in October that he had advised the Mashantucket Pequots to consider sharing profits in exchange for a promise that more casinos would not be legalized in Connecticut.

Luciani, who subsequently resigned from Foxwoods, said at the time that any such deal would have to be proposed by the state, and would be made solely at the discretion of the Pequots' governing tribal council.

A spokeswoman for the tribe was not available Friday to comment on whether the tribe would consider a profit-sharing deal.

But Bob Walker, a spokesman for the U.S. Department of Interior's Bureau of Indian Affairs, said states are barred under federal law from levying taxes or fees on profits from Indian gambling.

The only money states are allowed to collect from tribal casinos is reimbursement for regulation or other state services, such as policing. The Mashantucket Pequot tribe has agreed to pay Connecticut $2.6 million this year to cover the cost of state police, employee licensing and liquor control.

Walker said other states have submitted Indian gambling contracts to the Bureau of Indian Affairs calling for the state to share a percentage of the tribe's profits. All such contracts have been rejected, he said.

"Compensation has to be tied more closely to actual cost instead of a percentage of revenue," Walker said. "Compacts have been rejected because there seems to be what amounts to some revenue sharing."

Under federal law, tribes are allowed to offer high-stakes versions of any wagering allowed in their states. States and tribes are required to sign contracts, known as "compacts," before casino-type gambling can begin on reservations. The compacts then must be approved by the Interior Department.

Although for-profit casino games are illegal in Connecticut, the tribe is able to run Foxwoods because the state allows charity Las Vegas nights.

Weicker has been fighting the Pequots' casino since he took office in 1991, even trying unsuccessfully to outlaw charity Las Vegas nights. He has come to peace with the tribe, but Halloran said the governor has not decided whether to pursue a profit-sharing deal.

The opening of the wildly successful Foxwoods casino in February was a catalyst for state lawmakers to consider allowing commercial casinos to compete with the tribe.

Interest in casinos continued to escalate over the past year, with Las Vegas casino mogul Steve Wynn and the company that owns Harrah's casinos offering to spend hundreds of millions of dollars to build tax-paying casinos in Hartford and Bridgeport.

Weicker has said that he would do everything in his power to prevent more casinos from opening in Connecticut.

But state Sen. William A. DiBella, D-Hartford, a casino supporter, said taking money from the Pequots would not accomplish his goal of providing thousands of jobs and millions in tax money for the state's most troubled cities.

"The reason I oppose it is the very reason I support casino gambling in Connecticut," said DiBella, who will be Senate majority leader in the upcomig legislative session. "My main objective is to create an economic development catalyst for the cities."